US long-term borrowing costs hit 25-year high; weakening of UK's EV sales targets criticised – as it happened
News Source
•Fri, 14 Aug 2026 15:41:04 GMT
📰 What Happened
The US government sold 30-year bonds at the highest borrowing costs in 25 years. This means the US is paying more interest than at any point since 2001 to borrow money for the long term. The auction shows that investors want higher returns to lend money to the US government. Rising borrowing costs could make it more expensive for the government to fund programs and pay its debts.
Other economic news showed mixed signals. US retail spending fell, and consumer confidence dropped. The FTSE 100 in London posted its fifth daily fall in a row. In the eurozone, the economy grew 0.4% in the second quarter but jobs growth was slower. The Bank of Japan is reportedly considering a rate hike in September, which could affect global markets.
🔍 The Backstory
Long-term borrowing costs, measured by bond yields, are a key sign of how the economy is doing. When yields go up, it means the government has to pay more to borrow. This can happen when investors worry about inflation, government debt, or future economic growth. The US national debt has grown a lot in recent years, and higher rates make it more expensive to manage that debt.
The US government borrows money by selling Treasury bonds. These bonds are considered one of the safest investments in the world. But even safe investments need to offer competitive returns. The 25-year high in borrowing costs reflects a mix of factors including inflation concerns, high government spending, and global economic uncertainty. Higher US borrowing costs can also affect other countries by making it more expensive for them to borrow or by strengthening the US dollar. This creates challenges for economies around the world.
🎯 Why It Matters
Higher US borrowing costs can mean higher interest rates on your credit cards, mortgages, and car loans. It also affects how much the government can spend on schools, roads, and healthcare. When the US pays more to borrow, it affects the whole global economy.
The US government sold 30-year bonds at the highest borrowing costs in 25 years. This means the US is paying more interest than at any point since 2001 to borrow money for the long term. The auction shows that investors want higher returns to lend money to the US government. Rising borrowing costs could make it more expensive for the government to fund programs and pay its debts.
Other economic news showed mixed signals. US retail spending fell, and consumer confidence dropped. The FTSE 100 in London posted its fifth daily fall in a row. In the eurozone, the economy grew 0.4% in the second quarter but jobs growth was slower. The Bank of Japan is reportedly considering a rate hike in September, which could affect global markets.
Long-term borrowing costs, measured by bond yields, are a key sign of how the economy is doing. When yields go up, it means the government has to pay more to borrow. This can happen when investors worry about inflation, government debt, or future economic growth. The US national debt has grown a lot in recent years, and higher rates make it more expensive to manage that debt.
The US government borrows money by selling Treasury bonds. These bonds are considered one of the safest investments in the world. But even safe investments need to offer competitive returns. The 25-year high in borrowing costs reflects a mix of factors including inflation concerns, high government spending, and global economic uncertainty. Higher US borrowing costs can also affect other countries by making it more expensive for them to borrow or by strengthening the US dollar. This creates challenges for economies around the world.
Higher US borrowing costs can mean higher interest rates on your credit cards, mortgages, and car loans. It also affects how much the government can spend on schools, roads, and healthcare. When the US pays more to borrow, it affects the whole global economy.